Economic Fallacy of the Day: Others’ Money

Unions are well-known for their boorish ignorance of economics. It’s especially dramatic in the Canadian province of Quebec, where they still have a tremendous political influence.

This ignorance has been showing off with the election of the Liberal government earlier this year. The party, *finally* aware that others’ money is running out, has launched a vast campaign to ask voters’ opinion on how to reform public spending and where cuts should be made. Of course, unions are not satisfied; indeed, cuts in public spending means they will lose members. And so, one unionist asks the question: Why not look for new sources of revenues instead of cutting spending?

There are several problems with that question, Madame Chabot. Most important of all: You have no right whatsoever to thatmoney. If you do have a right to that money, why cowardly use a middleman (the state) to get it? Because it would be theft otherwise, right? In other words, you expose yourself as a modern slave owner. Indeed, if taking 100 percent of one’s production is slavery, at what percentage does it stop being slavery?

Second, the province of Quebec is the fiscal hell of North America for a reason: It taxes the heart and soul of its citizens. It has the highest income tax bracket (25.75%) of any jurisdiction north of Mexico – it’s much higher than California or Oregon. It has the second highest sales tax of the sub-continent. It has the second highest rate of mining income tax when combining federal and local taxes on the planet. In fact, government is so hostile towards natural resources development that investors would rather go to Kazakhstan than Quebec!

Third, despite these prohibitive levels of taxation, La Belle Province is overly indebted – nearly 78 percent of GDP, in the top 10 jurisdictionson the planet. Of course, left-wing statists like Madame Chabot will dismiss this figure, stating that the province has plenty of assets to cover the debt. There’s one problem with that statement: It supposes that the assets (hydro dams, buildings, roads, etc.) are liquid, i.e. that they can be sold easily and that their property can be easily transfered. It’s far from being the case; plus, whenever someone proposes even the slighest selling of public-owned enterprises (or worse, letting foreign companies do the work), they scream their lungs off against it.

Finally, saying that government programs create wealth is one of the worst cases of “broken windows” I’ve seen in years. Yes, “we see” that jobs are created, especially unionized ones. But “we don’t see” the wealth that isn’t created because of all the taxes created to pay for these programs.

And these programs do not live to their expectations. Both the public daycare services and the parental leave programs have failed to increase birthrates significantly. Also, the supposed increase of women’s participation in the workforce due to public daycare is uncertain, considering women’s participation rates increased throughout the country.

In other words, if Madame Chabot truly wanted “social” justice, she would demand the forthwith abolition of social programs like public daycare and parental leave. The have become bottomless pits whose deficits keep increasing. What makes families richer is letting them have more money in their pockets, not letting the nanny state decide how that money should be spent.

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I am best described as a gray sheep (i.e. not fitting anywhere): I'm gay, I listen to rock/hard rock/video game music, my diet (no grain, lots of saturated fats and animal proteins) would give Michael Bloomberg a heart attack, my only cleaning products are baking soda, vineagar and bleach and I wear the same clothes more than once

You mentioned Bastiat! ‘What is Seen and What is Not Seen’ makes me swoon on every reading. These days I read one section in a sitting, but it never fails to amaze me that such a way of laying out the problem is so perfect for explaining why ‘public spending’ does not in itself improve society whatsoever! Jolly good show, old chap!